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Heres A 12- Stock Sane Portfolio For Crazy Times

Here's A 12-Stock 'Sane Portfolio' For Crazy Times

In these tumultuous times, with markets swinging wildly amid geopolitical tensions, inflationary pressures, and economic uncertainty, investors are understandably anxious. The year 2025 has already seen its share of upheavals: escalating trade wars between major powers, volatile energy prices driven by supply chain disruptions, and a tech sector that's ballooning one day and bursting the next. It's enough to make even seasoned investors question their strategies. But amid the chaos, there's a path to sanity – a diversified portfolio of solid, undervalued stocks that can weather the storm. As a value investor with decades of experience, I've long advocated for portfolios built on fundamentals rather than hype. Today, I'm presenting my "Sane Portfolio" – a selection of 12 stocks that emphasize stability, reasonable valuations, and resilience. These aren't flashy growth darlings; they're workhorses that generate cash flow, pay dividends, and have proven track records through multiple market cycles. The goal here is balance: a mix of sectors including healthcare, consumer goods, energy, finance, and technology, with an eye toward companies trading below their intrinsic value. By allocating equally – say, about 8% to each stock – you create a buffer against volatility. Let's dive into the picks, explaining why each one fits this sane approach.

Starting with healthcare, a sector that's often defensive in crazy times, I recommend Johnson & Johnson (JNJ). This pharmaceutical giant has been a cornerstone of stability for over a century. With a diverse portfolio spanning consumer health products, medical devices, and innovative drugs, JNJ boasts consistent revenue streams that hold up even in recessions. Its current price-to-earnings ratio hovers around 15, well below the market average, and it offers a dividend yield of about 3%. In an era of aging populations and ongoing health crises, JNJ's R&D pipeline ensures long-term growth without the wild swings of biotech upstarts. It's the kind of stock that lets you sleep at night.

Next, in consumer staples, Procter & Gamble (PG) stands out as a beacon of reliability. Think Tide detergent, Pampers diapers, and Gillette razors – everyday essentials that people buy regardless of economic headlines. PG has navigated inflationary environments masterfully, passing on costs while maintaining market share. Trading at a forward P/E of 22, it's not dirt cheap, but its 2.5% dividend and history of annual increases make it a compounding machine. During the 2022-2023 market turmoil, PG outperformed the S&P 500, proving its mettle in crazy times.

Shifting to retail, Walmart (WMT) is my pick for essential commerce. As the world's largest retailer, it thrives on low prices and vast scale, drawing budget-conscious shoppers in downturns. With e-commerce growth accelerating and international expansion, Walmart is more than just brick-and-mortar. Its P/E ratio of 25 might seem high, but consider its fortress-like balance sheet and 1.5% dividend. In volatile markets, Walmart's ability to capture market share from weaker competitors makes it a sane choice.

For energy, ExxonMobil (XOM) provides exposure to a sector that's cyclical but essential. Despite the push toward renewables, oil and gas remain critical, and ExxonMobil's integrated operations – from exploration to refining – offer stability. At a P/E of 12, it's undervalued compared to peers, with a 4% dividend yield that's been paid for decades. Geopolitical risks may spike oil prices, benefiting XOM, but its diversification into low-carbon tech hedges against long-term shifts.

In finance, Berkshire Hathaway (BRK.B) is the ultimate sane holding. Warren Buffett's conglomerate is a collection of high-quality businesses, from insurance to railroads, with a massive cash hoard for opportunistic buys. No dividend, but its book value growth is legendary. Trading at about 1.4 times book value, it's a bargain in frothy markets. Berkshire's conservatism shines in crazy times, as seen during the 2008 crisis.

Technology needs representation, but sanely: Microsoft (MSFT) fits perfectly. Beyond its software dominance, Azure cloud computing and AI investments provide growth without excessive risk. At a P/E of 30, it's premium-priced, but recurring revenues and a 1% dividend add stability. Microsoft's ecosystem is too entrenched to falter easily, making it resilient amid tech volatility.

Another tech-adjacent pick is Visa (V), the payments powerhouse. As cashless transactions boom globally, Visa's network effects create a moat. It doesn't issue cards, so credit risk is minimal. With a P/E of 28 and 0.8% dividend, it's growing steadily at 15% annually. In economic uncertainty, Visa benefits from both consumer spending and digital shifts.

For industrials, Caterpillar (CAT) offers exposure to infrastructure and mining. Global rebuilding efforts, from U.S. highways to emerging market booms, drive demand for its equipment. Trading at a P/E of 14 with a 2.5% dividend, it's undervalued given commodity cycles. Caterpillar's durability through recessions makes it sane.

In utilities, Duke Energy (DUK) provides defensive income. Regulated power generation ensures steady cash flows, with a 4.5% dividend yield. At a P/E of 18, it's fairly priced for its low-volatility profile. As energy transitions unfold, Duke's mix of renewables and traditional sources positions it well.

Consumer discretionary gets a nod with McDonald's (MCD). Fast food is recession-resistant; people still eat out affordably. Global franchising generates royalties with minimal capital outlay. P/E of 22, 2.5% dividend – it's a cash cow. McDonald's adapts to trends like delivery, thriving in crazy times.

For materials, Dow Inc. (DOW) is a value play in chemicals. Essential for plastics and coatings, Dow benefits from industrial recovery. At a P/E of 10 and 5% dividend, it's cheap amid cyclical lows. Its innovation in sustainable materials adds upside.

Finally, in telecommunications, Verizon (VZ) rounds out the portfolio. Reliable wireless and broadband services yield stable revenues. High dividend of 6% at a P/E of 9 makes it attractive. As 5G expands, Verizon's infrastructure moat protects against volatility.

This 12-stock portfolio isn't about chasing hot trends; it's about sanity. Diversified across sectors, with an average P/E of around 18 and yield of 3%, it aims for 8-10% annual returns over time, with lower risk than the broader market. In crazy times, patience and fundamentals win. Remember, past performance isn't indicative of future results, and always consult a financial advisor. But if you're feeling overwhelmed by market madness, this sane approach could be your anchor.

Read the Full Forbes Article at:
[ https://www.forbes.com/sites/johndorfman/2025/08/04/heres-a-12-stock-sane-portfolio-for-crazy-times/ ]